North Dakota's Industrial Commission (IC), which oversees oil/natural gas production, on Thursday extended the deadline for meeting state-mandated captured wellhead gas goals, pushing them to the end of next year rather than January.
The state's chief oil/gas regulator, Lynn Helms, director of the IC's Department of Mineral Resources (DMR), warned late last month that the gas capture goals for producers might have to be pushed back (see Shale Daily, Aug. 27) from the 85% set for Jan. 1. The IC had asked Helms to provide additional details supporting the need to push back the deadlines and make that case at its September meeting, which he did.
The set of circumstances driving the need for postponement includes a 20% increase in wellhead gas production tied to the move by producers to concentrate drilling in the Bakken Shale sweet spot centered in four prime counties (Dunn, McKenzie, Mountrail and Williams), Helms told the IC, along with weather and federal regulatory delays, which have held up completion of gathering and processing infrastructure projects.
Last year, when producers agreed to the target goals working all the way to eventual 95% capture, they stipulated a number of supporting factors, including more gas processing plants being completed, the ability to get gathering infrastructure rights-of-way and recognition that state oil-conditioning requirements will increase wellhead gas volumes.
At issue is a series of phased-in goals established by the state last year (see Shale Daily, July 3, 2014) that producers generally have been meeting or exceeding in recent months. In June, with a goal of 77% capture in effect, an average of 82% of wellhead gas was captured statewide.
Under the IC's action, producers will need to meet an 80% capture threshold April 1, and the postponed 85% target by Nov. 1, 2016.
"As far as DMR is concerned, we are pleased with the outcome as we feel that this was necessary for allowing an additional construction season [post-winter 2015-2016] to permit additional [gathering/processing] infrastructure to come into service," a DMR spokesperson told NGI's Shale Daily on Friday.
The IC is composed of Gov. Jack Dalrymple, Attorney General Wayne Stenehjem and Agriculture Commissioner Doug Goehring.